The EURUSD pair traded higher on Tuesday as technical support combined with positive economic talk to support the currency pair. The currency pair found a brief bottom around 1.0771 before the sellers took control. This support was further reinforced by the climbing 20-day moving average (DMA). This movement follows as the EURUSD price trades just above the 1.0830 level in the middle of the European session. Today’s market sentiment indicates that bullish traders are very much in control in the short term. The duo remains unable to overcome the important 1.0860 barrier, marked out by the high of Monday and the 10-day moving average.
For EURUSD, the 1.0771 level is key. It holds decisively, now well underpinned by the 200DMA at 1.0729, the price still well above this support. That stability creates the potential for a higher low, which means the potential to continue moving up further still if the right conditions are present. The biggest and most shocking reversal lies ahead. For it to materialize, the EURUSD needs to climb above the 1.0860 area, confirming a decisive change in market sentiment.
Even with these technical advancements in place, external economic factors are still the larger driving force behind the EURUSD price. The euro’s advance occurs despite Germany’s IFO Business Climate Index coming in at lower than expected improvement for March. Market participants are holding a very close eye on tariff negotiations and US Consumer Confidence statistics. In particular, they’re looking out for the release of US Personal Consumption Expenditures (PCE) on Friday, as all of these variables can move the currency pair.
The relationship between these macroeconomic indicators and technical levels highlights just how complicated today’s market climate is. Market participants should be on high alert as they try to navigate through these warning signs. They must meld technical analysis with macroeconomic data to inform their trading strategy.